Money Markets Scale Back ECB Rate Hike Bets on Coronavirus Variant Worries

By Reuters
November 26, 2021 Updated: November 26, 2021

LONDON—Euro zone money markets on Friday scaled back bets on a rate hike from the European Central Bank next year as news of a new coronavirus variant spreading across South Africa cast a shadow over the short-term economic outlook.

Money market futures were pricing in roughly a 50 percent chance of 10 basis point rate hike from the ECB in December 2022, having fully priced in such a move earlier this week.

That move was reflected by a smiliar pull back in rate hike bets in the United States and Britain.

The latest COVID-19 headlines news comes as Europe already battles a resurgent outbreak of the virus, triggering fresh restrictions in a numebr of countries.